The agriculture ‘crisis’

meta-cre­ation_­date: 12 Sep­tem­ber, 2003
The state of play as of Thurs­day 11 Sep­tem­ber is that agree­ment on all oth­er issues in these nego­ti­a­tions * access to mar­kets for indus­tri­al goods
* improve­ments in ser­vices trade
* agree­ment to improve gov­ern­ment pro­cure­ment prac­tices
* agree­ment to work on mea­sures to sim­pli­fy and stream­line trade reg­u­la­tions and doc­u­men­ta­tion (‘trade facilitation&#8217)
* etc., etc. …depends on par­tic­i­pants reach­ing agree­ment on agri­cul­ture. But on that sub­ject, there is still a wide gap. Meet­ings held by the ‘facil­i­ta­tor’ (Amb George Yeo of Sin­ga­pore) among the main pro­tag­o­nist groups (US-EU, G21, Cairns Group) have been dif­fi­cult to arrange and have col­lapsed quick­ly when they took place. One of the key prob­lems is that the G21 has very lim­it­ed inter­nal cohe­sion on some key issues such as the degree to which devel­op­ing coun­tries (its mem­bers) must open their own mar­kets. This means that the Group can’t effec­tive­ly nego­ti­ate com­pro­mis­es on its own pro­pos­als and no-one wants to deal with them on that basis …
The US negotiators—under crit­i­cism from both Cairns Group mem­bers, their own indus­try advi­sors and from the world’s press—have told Ambas­sador Yeo, who is facil­i­tat­ing the con­sul­ta­tions on agri­cul­ture that they would be hap­py to back away fromt the ‘joint text’ with the EU if they could find broad agree­ment with oth­ers on a stronger agree­ment on mar­ket access and export sub­si­dies. Nat­u­ral­ly, this was an unpleas­ant sur­prise for the EU, which may have thought that it had reached an agree­ment with the Unit­ed States. There is little—if any—opposition to the idea that export sub­si­dies should be elim­i­nat­ed on all prod­ucts, except from the world’s largest trad­ing bloc, the Euro­pean Union. The EU accounts for most of the export sub­si­dies, but has offered only a vague promise to elim­i­nate them, at some future date, on prod­ucts ‘of inter­est to devel­op­ing coun­tries’. They have refused to pro­vide any clear­er char­ac­ter­i­za­tion of their offer; for exam­ple, the prod­ucts that would be affect­ed. This guard­ed response does­n’t engen­der much con­fi­dence among oth­er coun­tries that they plan to make any big cuts in their sub­si­dies any time soon. So the EU is feel­ing some­what friend­less… and may be look­ing for a com­pro­mise already: par­tic­u­lar­ly one that would unblock the talks on oth­er issues such as ser­vices that are more eco­nom­i­cal­ly sig­nif­i­cant for future EU growth. The ear­ly signs of com­pro­mise from the EU—tentative and infor­mal— nev­er­the­less amount to a remark­able change in pos­ture for Europe in agri­cul­ture nego­ti­a­tions. [Although, per­haps they feel they can afford to com­pro­mise on a ‘frame­work’ text that has few def­i­nite com­mit­ments.] The G21 text on mar­ket access has sev­er­al advan­tages over the text in the draft chair­man’s text. For exam­ple, it pro­vides for a clear oblig­a­tion to expand the tar­iff quo­tas that pro­vide ‘min­i­mum’ lev­els of access to mar­kets pro­tect­ed by high tar­iffs. But it’s far from per­fect. Find­ing broad agree­ment on a stronger mar­ket access agree­ment than is in the EU-US joint text—an agree­ment that would lead the US to aban­don its sup­port for the joint text — is far from easy. Some of the prob­lems: * An agree­ment on mar­ket access has to be stronger than the EU-US joint text to attract the sup­port of the G21 or the remain­ing Cairns Group mem­bers. But it can’t be “too strong” or it will be vig­or­ous­ly opposed by pro­tect­ed sec­tors of US agri­cul­ture; pre­vent­ing the US from jump­ing-ship
* An agree­ment on mar­ket access has to requ­uire devel­op­ing coun­tries to open up their own mar­kets more than is pro­vid­ed in the the cur­rent G21 text or nei­ther the US (nor the EU), nor the remain­ing Cairns Group mem­bers will sign-on. In fact, some mem­bers of the G21 are also now hop­ing that this aspect of the G21 paper will be amend­ed since they send a high pro­por­tion of their agri­cul­tur­al exports to oth­er devel­op­ing coun­tries
* An agree­ment that requires Chi­na (a devel­op­ing coun­try) to make sig­nif­i­cant fur­ther cuts to its tar­iffs on top of those it made when it joined the WTO two years ago will prob­a­bly not win Chi­nese support

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